N00024-18-R-2210_Heavy_Polar_Icebreaker_Solicitation_030218.docx

N0002418R2210

Section B - Supplies or Services and Prices

CLIN Number 0001

Advance Planning & Engineering HPIB 1

FPI

Advance Planning, Engineering, Design, and Procurement of Long Lead Time Material (LLTM) for Heavy Polar Icebreaker (HPIB) Cutter 1

FPI/EPA

(See Notes A, B, H, I, and K) FOB: Origin (Shipping Point)

PURCHASE REQUEST NUMBER: N0002417MR02574

TARGET COST

TARGET PROFIT

TOTAL TARGET PRICE

CEILING PRICE

SHARE RATIO ABOVE TARGET

SHARE RATIO BELOW TARGET

CLIN Number 0002

FPI

HPIB Detail Design and Construction for Cutter 1

FPI/EPA

(See Notes A, B, C, H, and K)

TARGET COST

TARGET PROFIT

TOTAL TARGET PRICE

CEILING PRICE

SHARE RATIO ABOVE TARGET

SHARE RATIO BELOW TARGET

CLIN Number 0003

FPI

HPIB Detail Design and Construction for Cutter 2

FPI/EPA

(See Notes A, B, C, and K)

TARGET COST

TARGET PROFIT

TOTAL TARGET PRICE

CEILING PRICE

SHARE RATIO ABOVE TARGET

SHARE RATIO BELOW TARGET

CLIN Number 0004

FPI

HPIB Detail Design and Construction for Cutter 3.

FPI/EPA

(See Notes A, B, C, and K)

TARGET COST

TARGET PROFIT

TOTAL TARGET PRICE

CEILING PRICE

SHARE RATIO ABOVE TARGET

SHARE RATIO BELOW TARGET

CLIN Number 0005

Data Requirements

Not Separately Priced (NSP).

The data to be furnished hereunder shall be prepared in accordance with the Exhibit A Contract Data Requirements List (CDRL), attached hereto.

FOB: Destination

TARGET COST

TARGET PROFIT

TOTAL TARGET PRICE

CEILING PRICE

SHARE RATIO ABOVE TARGET

SHARE RATIO BELOW TARGET

CLIN Number 0006

Provisioned Item Orders

FFP

(See Notes C and D)

NET AMT

CLIN Number 0007

Hours

Analyses and reviews in support of the HPIB Program.

In accordance with the Section H clause "5252.216-9112 ORDERS (COST-PLUS-FIXED-FEE)" and "5252.216-9110 ORDERS (FIXED PRICE)."

(See Notes C, E, L, and N) FOB: Destination

CPFF

ESTIMATED COST

FIXED FEE

TOTAL EST COST + FEE

CLIN Number 0008

Engineering and Industrial Services

(See Notes C, F, and L)

NET AMT

CLIN Number 0009

Hours

In accordance with the Section H clause "5252.216-9112 ORDERS (COST-PLUS-FIXED-FEE)" and "5252.216-9110 ORDERS (FIXED PRICE)."

(See Notes C, E, L, and M) FOB: Destination

CPFF

ESTIMATED COST

FIXED FEE

TOTAL EST COST + FEE

CLIN Number 0010

Data Rights

NET AMT

CLIN Number 0011

COST

(See Notes C and G)

ESTIMATED COST

CLIN Number 0012

COST

(See Notes C and G)

ESTIMATED COST

CLIN Number 0013

COST

Correction of Defects after Limitation of Liability

Cost Only Correction of Defects associated with the 24 month warranty period of CLIN 0002 HPIB 1 DD&C

(See Note C and J)

ESTIMATED COST

CLIN Number 0014

COST

Correction of Defects after Limitation of Liability

Cost Only Correction of Defects associated with the 18 month warranty period of CLIN 0003 HPIB 2 DD&C

(See Note C and J)

ESTIMATED COST

CLIN Number 0015

COST

Correction of Defects after Limitation of Liability

Cost Only Correction of Defects associated with the 18 month warranty period of CLIN 0004 HPIB 3 DD&C

(See Note C and J)

ESTIMATED COST

CLIN NOTES

NOTE A: The Incentive will be determined as described in Section I clause “52.216-16 Alt I INCENTIVE PRICE REVISION-FIRM TARGET – ALTERNATE I”.

NOTE B: The Offeror shall propose a Fixed-Price Incentive Firm Target Cost for CLINs 0001- 0004 within the following Government/Contractor share line and ceiling boundaries:

NOTE C: Option CLIN to which the Section I clause “52.217-7 OPTION FOR INCREASED QUANTITY-SEPARATELY PRICED LINE ITEM,” applies and which is to be supplied only if and to the extent said option is exercised.

NOTE D: The estimated burdened dollar amount is $75,000,000. It is understood and agreed that the Government has no obligation under this contract to issue any orders hereunder. Orders will be placed in accordance with the terms and conditions of Section C clause “PROVISIONED ITEMS ORDERS - ALTERNATE II.” Funding will be provided with each order that is placed. The Government will apply the Attachment J-17, Contract Burdened Pricing Rates, fully-burdened rates to the direct labor and direct material bases to derive the total FFP for each order.

NOTE E: These CLINs may be incrementally funded in accordance with Section I clause “52.232-22 LIMITATION OF FUNDS” and Section H clause “5252.232-9104 ALLOTMENT OF FUNDS”. Orders will be placed in accordance with the terms and conditions of Section H clause “5252.216-9112 ORDERS (COST-PLUS-FIXED-FEE).” Funding will be provided with each order that is placed. The Government will apply the Attachment J17, Contract Burdened Pricing Rates, fully-burdened rates to the direct labor and direct material bases to derive the total CPFF for each order.

NOTE F: The estimated burdened dollar amount is $2,500,000. It is understood and agreed that the Government has no obligation under this contract to issue any orders hereunder. Orders will be placed in accordance with the terms and conditions of Section H clause “5252.216-9110 ORDERS (FIXED-PRICE).” Funding will be provided with each order that is placed. The Government will apply the Attachment J17, Contract Burdened Pricing Rates, fully-burdened rates to the direct labor and direct material bases to derive the total FFP for each order.

NOTE G: This is a special incentive and shall be awarded in accordance with the Section B clause entitled “DETERMINATION OF SPECIAL INCENTIVE.”

NOTE H: The parties agree that CLINs 0001 and 0002 may be merged (subsumed) upon the exercise of option of CLIN 0002. In the event that CLINs 0001 and 0002 are subsumed, the Contractor agrees that long lead time material procured and efforts performed under CLIN 0001 will be considered contractor furnished property for the construction of the Heavy Polar Icebreaker.

NOTE I: CLIN 0001 shall have a Ceiling Price Not to Exceed (NTE) $140M.

NOTE J: The parties agree that CLINs 0013, 0014, and 0015 respectively may be exercised and funded to account for Warranty costs above the limitation of liability as established in HQ E-2-0012 LIMITATION OF CONTRACTOR'S LIABILITY FOR CORRECTION OF DEFECTS.

NOTE K: Any contract action, including undefinitized contract actions, awarded in accordance with the "CHANGES" clause that adjusts the Section B target cost shall be subject to a target profit rate not to exceed: 14% for a prospectively priced proposal; 9% for a less than prospectively priced proposal; or 4% for a proposal with all actuals. The term "awarded" is defined as executed via contract modification. A "prospectively priced proposal" is defined as a proposal comprised of all estimated costs and no actual costs. A "less than prospectively priced proposal" is defined as a proposal comprised of a combination of actual and estimated costs. A "proposal with all actuals" is defined as a proposal comprised of all actual costs and no estimated costs.

NOTE L: The parties agree that the Government may create additional CLINs for administrative purposes to allow for the funding of both Firm Fixed Price (FFP) and Cost Plus Fixed Fee (CPFF) orders.

NOTE M: The estimated burdened dollar amount is $2,500,000. It is understood and agreed that the Government has no obligation under this contract to issue any orders hereunder. Orders will be placed in accordance with the terms and conditions of Section H clause “5252.216-9112 ORDERS (COST-PLUS-FIXED-FEE).” Funding will be provided with each order that is placed. The Government will apply the Attachment J17, Contract Burdened Pricing Rates, fully-burdened rates to the direct labor and direct material bases to derive the total CPFF for each order.

NOTE N: The estimated burdened dollar amount is $4,200,000. It is understood and agreed that the Government has no obligation under this contract to issue any orders hereunder. Orders will be placed in accordance with the terms and conditions of Section H clause “5252.216-9112 ORDERS (COST-PLUS-FIXED-FEE).” Funding will be provided with each order that is placed. The Government will apply the Attachment J17, Contract Burdened Pricing Rates, fully-burdened rates to the direct labor and direct material bases to derive the total CPFF for each order.

DETERMINATION OF SPECIAL INCENTIVE

A. General

1. The successful delivery of an effective and affordable HPIB is of paramount importance to the Government. In order to attain this goal, it is in the Program's best interests to incentivize increasingly more efficient and cost effective Contractor performance and to reward Contractor efforts that substantially contribute to the production and sustainment of an affordable HPIB.

2. Accordingly, in addition to any profit or other compensation which may be paid to the Contractor, pursuant to other clause(s) of this contract, the Contractor may earn additional incentive fee, as determined by the Special Incentive Fee Determining Official (SIFDO), CG9326, in consultation with the Procuring Contracting Officer (PCO), NAVSEA 02, pursuant to the procedures set forth in this clause.

3. Any incentive or portion thereof, in Table B below, which is not earned in accordance with the terms of the incentive, will not roll over or be available for any other incentive or any subsequent period, event or milestone.

B. Special Incentive Areas of Emphasis The Contractor will be evaluated in the following areas of emphasis:

1) Production Readiness

2) Quality Early Delivery

3) Operations & Sustainment (O&S) Reduction Initiatives

4) Capital Expenditures (CAPEX)

The amount of incentive fee payable to the Contractor, pursuant to this clause, shall be determined in accordance with the procedures set forth in paragraph E using the evaluation factors set forth in paragraph C below. The total incentive fee amount available pursuant to this clause is up to $28,000,000 as outlined in the table below.

Table B

*Note: Table B contains the potential special incentive amounts available, and this table should not be construed as a commitment by the Government. The Government reserves the right to change the amounts available for a particular hull or hulls within any category description.

C. Evaluation Factors Award of this special incentive fee will be based on the below distinct objectives:

1. Production Readiness The Contractor may earn the Production Readiness incentive provided the Contractor meets the criteria outlined below. To be considered for this incentive, the Contractor must fulfill the entrance and exit criteria for Production Readiness Review (PRR) as stated in Attachment J-2 of this Contract; this is in addition to all PRR requirements. To earn an incentive, the Contractor must demonstrate to the Government that, in addition to the above requirement, adequate production information is available at the time of the initial PRR (if multiple PRR’s are required) to sustain construction activities above the PRR minimum requirements stated in Attachment J-2 of this Contract, in addition to satisfactorily attaining all other PRR requirements. The Government will verify the production information available against the Contractor’s Integrated Master Schedule (IMS) in order to determine whether the Contractor has earned this incentive. This incentive will be awarded in accordance with the Government findings based on Table C.1. Production Readiness incentive payments may be made up to the total amount available in Table B for this incentive, subject to availability of funds.

Table C.1

2. Quality Early Delivery The Contractor may earn the Quality Early Delivery incentive provided the Contractor meets the criteria outlined below. The contract delivery date is set forth in Section F. To be eligible for the Quality Early Delivery incentive, at delivery, 100% of all contractor-responsible “starred”, “priority-one safety”, and all trial cards listed as a “top 10% Government priority,” which may include the aforementioned “starred” and “priority-one safety” trial cards, shall be corrected or waived by the Government. At time of trial completion, the Government will prioritize contractor-responsible trial cards which will be basis of the “top 10% Government priority” trial cards.

For the purposes of earning the Quality Early Delivery incentive, a ship is considered to have been delivered upon the cognizant Government’s signature on the DD-250.

The Quality Early Delivery incentive value earned shall be computed using the following formula:

P = D + (Q x K)

Where:

P = Incentive Value Earned D = Delivery Date Incentive in accordance with Table C.2 Q = Quality Incentive Value in accordance with Table C.2

Table C.2

% of Trial Cards Closed at Delivery (K)

K = K Value in accordance with calculation below. Contractor-Responsible trial cards (screened “KA” with status “O” for open and screened to be completed prior to delivery) not completed by the Contractor or waived by the Government at the time of delivery, as verified in the Government’s system of record shall be used to determine K value. Trial card counts shall not include duplicates or Government related impacts. KA open trial cards jointly screened by the Government and the Contractor to be completed after delivery will not be included in the trial card counts (these may include cards deferred due to material availability). All reasonable efforts shall be taken by both parties to clear any disputed trial cards prior to signing the DD-250.

K** = (Number of KA trial cards closed at delivery)* (Total number of KA trial cards at trial completion)*

* - “Starred”, “Priority-one safety” and “top 10% Government priority” shall not be included in this calculation ** If K is less than 0.60, then the value 0.0 shall be used in the Quality Early Delivery incentive value calculation. If K is greater than 1.00, then the value of 1.0 shall be used in the Quality Early Delivery incentive value calculation.

3. Operations & Sustainment (O&S) Cost Reduction Initiatives The Contractor may earn an O&S Cost Reduction Initiative incentive if the Contractor can identify O&S savings in the design and equipment selection for the vessel meeting the Return on Investment (ROI) parameters and Cost Reduction thresholds as described below. The Contractor may nominate O&S Cost Reduction Initiatives that improve lifecycle cost performance with emphasis on such initiatives as energy efficiency, preservation and coatings, reliability and maintainability, and reductions in crew workload. This incentive shall not include Contractor proposed modifications of Coast Guard operational requirements or staffing levels.

Process for eligibility for this incentive

a) The Contractor must submit to the Government a brief of its cost reduction idea, projected ROI, and an estimate of engineering hours required to develop a detailed implementation proposal and an estimate of anticipated ROI, at no cost or obligation to the Government. To be considered for this incentive, each cost reduction idea must have an anticipated ROI of at least 3:1 for the class. If a cost reduction idea is intended for implementation in multiple ships, the ROI may be calculated based on the cumulative estimated savings across all applicable hulls. ROI will be determined using the following formula:

ROIavg = [(x1 – y1) + (x2 – y2) + (x3 – y3)] # of Applicable Hulls*

ROI = ROIavg .

Cost to Implement Proposed design/method/process** x = Cost of Current design/method/process for indicated Hull number y = Cost of Proposed design/method/process for indicated Hull number

* Ship contract option must be exercised in order to qualify as applicable ** Cost to implement includes all Non-Recurring Engineering (NRE), non-recurring production (if any), and implementation proposal preparation costs

b) The Government will review each Contractor submission, and based solely at the Government’s discretion, authorize and provide funding, not associated with the incentive payment, for further development into implementation proposals based on reasonableness of the anticipated ROI and the Contractor’s proposed cost to prepare an implementation proposal.

c) The Contractor shall prepare and present to the Government an implementation proposal for each previously authorized cost reduction idea. To be considered for authorization, the implementation proposal shall:

1) Demonstrate a minimum 3:1 ROI, based on formula above. Identify total implementation cost, including NRE and, if applicable, non-recurring production costs.

2) Identify baseline cost, projected post-implementation cost, and projected savings per hull.

3) Identify engineering products impacted and corresponding implementation schedule.

4) Identify 1st Hull and schedule for implementation, and demonstrate that the new design/method/process will be implemented in normal production sequence, without impacting production schedule.

d) The Government will review, and at its discretion, select proposals to be implemented in production, based on reasonableness of the estimated ROI, implementation cost, and production impacts.

e) If an implementation proposal requires a change to the system specification (Attachment J-1) or other contract document, a contract change will be required. Contract change shall be in accordance with the Section C clause entitled “CONFIGURATION MANAGEMENT” and will require additional authorization time.

f) Government authorization of the implementation proposal and contract change, if required, is required for award of this incentive. Incentive may be awarded if the implementation proposal’s calculation of ROI is 3:1 or better for the class and awarded per the ‘savings-per-hull’ thresholds found in Table C.3. Approval shall be at the sole discretion of the Government and shall be based upon the Government’s determination that the Contractor’s proposed O&S Cost Reduction implementation project is in the best interests of the HPIB Program. In the event of the Government’s approval of any such proposed project, the Government shall determine the amount of the Special Incentive to be paid to the Contractor, and the milestones, dates, and/or circumstances at which point(s) payment(s) of any such Special Incentive shall be paid, up to the total amount available in Table B for this incentive, subject to availability of funds.

Table C.3

This incentive will be eligible for award until commencement of the initial Builder’s Sea Trials of the second vessel (if multiple Builder Trials are required).

g) For the purpose of tracking the total O&S incentive amount in accordance with paragraphs (a), (b) and (c), the following table reflects the approved initiatives, associated approval values and dates, and the difference between approved O&S Cost Savings initiative amounts and the total dollar amounts stated in Table B.

4. Capital Expenditures (CAPEX)

The Contractor will be evaluated in the area of investments in facilities and process improvement projects regarding its effectiveness in providing cost savings to the Government for HPIB construction, and for other Navy/Coast Guard Programs as applicable. Details are set forth below:

(a) In order to be considered for a CAPEX incentive payment, the Contractor must submit a fully supported Business Case Analysis (BCA) to the Program Manager (CG9326). The BCA shall include a description of the specific objectives to be achieved, description and rationale for the proposed approach, the benefits that address the concerns of the Contractor and the Government, metrics for evaluation of investment benefits, a statement of investment risks and risk mitigation, a project framework and implementation timeframe, investment cost estimates and the portion of the investment proposed to be funded by the Contractor. The contractor shall include return on investment calculations, calculate the net present value of savings on future US Navy/Coast Guard Ships, and apply the share-line ratio to calculate actual savings to the Government. Approval shall be at the sole discretion of the Government and shall be based upon the Government’s determination that the Contractor’s proposed CAPEX or Process Improvement project is in the best interests of the HPIB Program. In the event of the Government’s approval of any such proposed project, the Government shall determine the amount of the Special Incentive to be paid to the Contractor, and the milestones, dates, and/or circumstances at which point(s) payment(s) of any such Special Incentive shall be paid. CAPEX incentives for those approved facility improvements or process improvement projects will be paid in accordance with the investment implementation timeframe included in the BCA, up to the total amount available in Table B for this incentive, subject to availability of funds.

(b) The parties agree that, for the purpose of calculating depreciation expenses (FAR 31.205-11) and Facilities Capital Cost of Money (FCCM) (FAR 31.205-10) associated with the facilities and/or equipment acquired by the Contractor in accordance with this clause, any special incentive amount paid by the Government under this clause shall be excluded from the capitalized value of the facilities and/or equipment. This capitalized value (reduced by the special incentives) for facilities and/or equipment shall be utilized in the calculation of indirect rates for all Government contracts.

(c) In addition to paragraphs (a) and (b) above, the Contractor may submit BCAs for prime contractor or domestic manufacturer facility improvements or process improvement projects. Approval shall be at the sole discretion of the Government and shall be based upon the Government’s determination that the proposed CAPEX or Process Improvement project is in the best interest of the HPIB Program. A CAPEX incentive for those approved facility improvements or process improvement projects will be paid in accordance with the investment implementation timeframe included in the BCA. CAPEX incentive payments may be made up to the total amount available in Table B for this incentive, subject to availability of funds.

(d) Notwithstanding any other clause of this contract, if, in its sole discretion, the Government determines that any approved project significantly fails to meet the BCA savings estimates or fails to make progress in project execution therein contained, the Government may unilaterally revoke the prior approval for such project and may recover from the Contractor all or any portion of any Special Incentive amount(s) paid to the Contractor pursuant to paragraph (a) and (b) by withholding such amounts from any future payments to be made under this contract.

(e) All projects for which CAPEX incentives are paid to the Contractor under this clause shall be accounted for in accordance with the Contractor’s disclosure statement.

(f) The parties acknowledge that they will have relied upon the approved BCA and the facilities/project investment evaluation model provided by the Contractor to the Government in establishing the amount of the CAPEX incentive available under this clause. In the event that either the Government or the Contractor discovers a formula or computational error in such model that would result in an overpayment of CAPEX incentive to the Contractor, the discovering party shall provide prompt written notice to the other, and the parties shall endeavor in good faith to negotiate the appropriate corrections to the BCA. The Contractor shall promptly refund to the Government any overpayment of CAPEX incentive resulting from such modification.

(g) This incentive will be eligible for award until the total amount available in Table B for this incentive has been earned or until commencement of the lead ship HPIB launch, whichever is earlier.

(h) For the purpose of tracking the total CAPEX incentive amount in accordance with paragraphs (a) and (b), the following table reflects the approved BCAs, associated approval values and dates, and the difference between approved BCA amounts and the total dollar amounts stated in Table B.

D. Special Incentive Fee Determining Official (SIFDO)

The Program Manager (CG9326) in coordination with the PCO will determine the Special Incentive Fee earned for each evaluation factor.

E. Special Incentive Determination and Reclama Procedures

1. Within thirty (30) working days after completion of the requirements for an incentive payment per CLIN, the Contractor shall furnish to the SIFDO a self-evaluation and such other information as may be reasonably required to assist the SIFDO in its evaluation of the contractor’s performance for the factors listed in paragraph (C). The Contractor shall include a rating for each of the factors with rationale supporting the proposed rating in the self-evaluation.

2. Within ten (10) working days after the Contractor provides its self-evaluation, the SIFDO will prepare a performance evaluation letter and will provide it to the Contractor.

3. Provided the SIFDO agrees with the contractor’s self-evaluation, the SIFDO, in coordination with the PCO, shall provide a final incentive fee determination within ten (10) working days of receiving the Contractor’s self-evaluation letter and the contractor will be notified as provided in paragraph E.6 of this clause.

4. If the SIFDO does not concur with the contractor’s self-evaluation, the SIFDO’s position with respect to the contractor’s evaluation will be expressed in a performance evaluation letter to the contractor. The Contractor shall submit written comments and any supporting documentation to the SIFDO within ten (10) working days of receiving the performance evaluation letter.

5. Within ten (10) working days of receiving any Contractor comments or reclama, the SIFDO will make a final determination of the special incentive fee earned.

6. Within ten (10) working days of the final determination, the SIFDO, in coordination with the PCO, will notify the Contractor, in writing, of the final determination and the PCO will issue a unilateral modification to the contract to provide the Special Incentive Fee.

F. Finality of Incentive Fee Determining Official’s Determination of the Special Incentive Fee

The determination of the amount of the Special Incentive fee, if any, to be paid to the Contractor is a unilateral decision made solely at the discretion of the Government consistent with procedures outlined above.

G. Payment Of Special Incentive

The Contractor will be paid the special incentive amount(s) earned upon the receipt of an executed contract modification awarding the special incentive and submittal of proper invoices to the cognizant Payment Office. The Contractor’s invoice shall show the amount of special performance incentive payable by contract line item. The Contractor’s invoice must cite the appropriate accounting data in order for payment to be effected.

CLARIFICATIONS TO THE INCENTIVE PRICE REVISION CLAUSE (FAR 52.216-16) (NAVSEA) (MAR 2018)

(a) In accordance with the terms of paragraph (e) (1) of the clause entitled "INCENTIVE PRICE REVISION-FIRM TARGET (FAR 52.216-16)", the parties hereby agree that the amounts determined in accordance with the following contract requirements shall not be considered costs incurred or to be incurred for the purpose of negotiating the total final cost or establishing the total final price:

(i) Any amounts paid or to be paid pursuant to paragraphs (b), (c), and (e) of the contract requirement entitled "INSURANCE PROPERTY LOSS OR DAMAGE LIABILITY TO THIRD PERSONS".

(ii) Any amounts paid or to be paid pursuant to the contract requirement entitled "ADDITIONAL INSURANCE PROVISIONS".

(iii) Any amounts paid or to be paid pursuant to the contract requirement entitled "INDEMNIFICATION UNDER PUBLIC LAW 85 804 (FAR 52.250 1)" [If authorized for and incorporated into this contract].

(iv) Any other text or clause of this contract which expressly provides for an amount to be reimbursed or paid to the Contractor by the Government or to be refunded or paid by the Contractor to the Government, other than through an adjustment of the contract price.

(b) The Total Final Price shall be established by adjusting the total final negotiated cost determined in paragraph (d) (1) of the Incentive Price Revision -Firm Target clause of this contract by an amount for profit or loss determined as follows:

(i) Subtract the amount determined in accordance with the contract requirement, "ECONOMIC PRICE ADJUSTMENTS" (EPA) adjustment (positive or negative) to calculate the EPA adjusted total final cost: then:

(ii) Calculate the amount for profit or loss as follows:

COST IS:

Equal to the total target cost ------ Total Target Profit.

(iii) The Total Final Price shall be the sum of: (A) the EPA adjusted total final negotiated cost, calculated in accordance with paragraph (i) above, and (B) the amount for profit or loss calculated in accordance with paragraph (ii) above; provided, however, that in no event shall the total final price exceed the Ceiling Price set forth in Section B of the Contract; and provided further that in no event shall the total amount determined in accordance with the contract requirement entitled "ECONOMIC PRICE ADJUSTMENTS," when added to the Total Final Price, calculated as set forth herein, exceed the sum of the Section B Ceiling Price.

(c) The Total Final Price of the items referred to above shall be evidenced by a modification to this contract signed by the Contractor and the Contracting Officer. Such price shall not be subject to revision notwithstanding any changes in the cost of performing the contract, with the following exceptions:

(i) insofar as the parties may agree in writing, prior to the determination of the Total Final Price, (A) to exclude any specific elements of cost from the Total Final Price and (B) to a procedure to provide subsequent disposition of such elements; and

(ii) to the extent any adjustment or credit is explicitly permitted or required by this or any other clause of this contract.

(End of Text)

CLAUSES INCORPORATED BY FULL TEXT

HQ B-2-0002 COMPENSATION (FI) (NAVSEA) (JAN 1990)

The total compensation to be paid the Contractor shall be the sum of the total final price(s) established in accordance with the "INCENTIVE PRICE REVISION--FIRM TARGET" (FAR 52.216-16) clause and the amounts payable to or due from the contractor pursuant to the contract provisions identified in paragraph (d)(1) of said clause.

Applicable CLINs: 0001, 0002, 0003, 0004

HQ B-2-0004 EXPEDITING CONTRACT CLOSEOUT (NAVSEA) (DEC 1995)

(a) As part of the negotiated fixed price or total estimated amount of this contact, both the Government and the Contractor have agreed to waive any entitlement that otherwise might accrue to either party in any residual dollar amount of $500 or less at the time of final contract closeout. The term “residual dollar amount” shall include all money that would otherwise be owed to either party at the end of the contract, except that, amounts connected in any way with taxation, allegations of fraud and/or antitrust violations shall be excluded. For purposes of determining residual dollar amounts, offsets of money owed by one party against money that would otherwise be paid by that party may be considered to the extent permitted by law.

(b) This agreement to waive entitlement to residual dollar amounts has been considered by both parties. It is agreed that the administrative costs for either party associated with collecting such small dollar amounts could exceed the amount to be recovered.

HQ B-2-0007 LIMITATION OF COST/LIMITATION OF FUNDS (NAVSEA) (SEP 1990)

The clause entitled "LIMITATION OF COST" (FAR 52.232-20) or "LIMITATION OF FUNDS" (FAR 52.232-22), as appropriate, shall apply separately and independently to each separately identified estimated cost.

Applicable CLINs: 0007, 0009

HQ B-2-0015 PAYMENT OF FEES(S) (LEVEL OF EFFORT – ALTERNATE I) (NAVSEA) (MAY 2010)

(a) For purposes of this contract, "fee" means "target fee" in cost-plus-incentive-fee type contracts, "base fee" in cost-plus-award-fee type contracts, or "fixed fee" in cost-plus-fixed-fee type contracts for level of effort type contracts.

(b) The Government shall make payments to the Contractor, subject to and in accordance with the clause in this contract entitled "FIXED FEE" (FAR 52.216-8) or "INCENTIVE FEE", (FAR 52.216-10), as applicable. Such payments shall be submitted by and payable to the Contractor pursuant to the clause of this contract entitled "ALLOWABLE COST AND PAYMENT" (FAR 52.216-7), subject to the withholding terms and conditions of the "FIXED FEE" or "INCENTIVE FEE" clause, as applicable, and shall be paid at the hourly rate(s) specified above per man-hour performed and invoiced. Total fee(s) paid to the Contractor shall not exceed the fee amount(s) set forth in this contract. In no event shall the Government be required to pay the Contractor any amount in excess of the funds obligated under this contract.

HQ B-2-0017 REFUNDS (SPARES AND SUPPORT EQUIPMENT) (NAVSEA) (SEP 1990) (MODIFIED) (OCT 2017)

(a) In the event that the price of a spare part or item of support equipment delivered under this contract significantly exceeds its intrinsic value, the Contractor agrees to refund the difference. Refunds will only be made for the difference between the intrinsic value of the item at the time an agreement on price was reached and the contract price. Refunds will not be made to recoup the amount of cost decreases that occur over time due to productivity gains (beyond economic purchase quantity considerations) or changes in market conditions.

(b) For purposes of this requirement, the intrinsic value of an item is defined as follows:

(1) If the item is one which is sold or is substantially similar or functionally equivalent to one that is sold in substantial quantities to the general public, intrinsic value is the established catalog or market price, plus the value of any unique requirements, including delivery terms, inspection, packaging, or labeling.

(2) If there is no comparable item sold in substantial quantities to the general public, intrinsic value is defined as the price an individual would expect to pay for the item based upon an economic purchase quantity as defined in FAR 52.207-4, plus the value of any unique requirements, including delivery terms, inspection, packaging or labeling.

(c) At any time up to two years after delivery of a spare part or item of support equipment, the Contracting Officer may notify the Contractor that based on all information available at the time of the notice, the price of the part or item apparently exceeds its intrinsic value.

(d) If notified in accordance with paragraph (c) above, the Contractor agrees to enter into good faith negotiations with the Government to determine if, and in what amount, the Government is entitled to a refund.

(e) If agreement pursuant to paragraph (d) above cannot be reached, and the Government's return of the new or unused item to the Contractor is practical, the Government, subject to the Contractor's agreement, may elect to return the item to the Contractor. Upon return of the item to its original point of Government acceptance, the Contractor shall refund in full the price paid. If no agreement pursuant to paragraph (d) above is reached, and return of the item by the Government is impractical, the Contracting Officer may, with the approval of the Head of the Contracting Activity, issue a Contracting Officer's final decision on the matter, subject to Contractor appeal as provided in the "DISPUTES" clause (FAR 52.233-1).

(f) The Contractor will make refunds, as required under this requirement, in accordance with instructions from the Contracting Officer.

(g) The Contractor shall not be liable for a refund if the Contractor advised the Contracting Officer in a timely manner that the price it would propose for a spare part or item of support equipment exceeded its intrinsic value, and with such advice, specified the estimated proposed price, the estimated intrinsic value and known alternative sources or item, if any, that can meet the requirement.

(h) This requirement does not apply to any spare parts or items of support equipment whose price is determined through adequate price competition. This requirement also does not apply to any spare part or item of support equipment with a unit price in excess of $100,000; or in excess of $25,000 if the Contractor submitted, and certified the currency, accuracy and completeness of, cost or pricing data applicable to the item.

HQ B-2-0020 TRAVEL COSTS – ALTERNATE I (NAVSEA) (APR 2015)

(a) Except as otherwise provided herein, the Contractor shall be reimbursed for its actual travel costs in accordance with FAR 31.205-46. The costs to be reimbursed shall be those costs determined to be allowable, allocable and reasonable by the Procuring Contracting Officer, Administrative Contracting Officer or their duly authorized representative, as advised by DCAA.

(b) Reimbursable travel costs include only that travel performed from the Contractor's facility to the worksite, in and around the worksite, and from the worksite to the Contractor's facility.

(c) Relocation costs and travel costs incidental to relocation are allowable to the extent provided in FAR 31.205-35; however, Contracting Officer approval shall be required prior to incurring relocation expenses and travel costs incidental to relocation.

(d) The Contractor shall not be reimbursed for the following daily local travel costs:

(i) travel at U.S. Military Installations where Government transportation is available,

(ii) travel performed for personal convenience/errands, including commuting to and from work, and

(iii) travel costs incurred in the replacement of personnel when such replacement is accomplished for the Contractor's or employee's convenience.

HQ B-2-0023 CONTRACT SUMMARY FOR PAYMENT OFFICE (COST/FIXED PRICE) (FEB 1997)

This contract includes the following mixture of cost reimbursement and fixed price line items:

Item Type

0001 FIXED

0002 FIXED

0003 FIXED

0004 FIXED

0005 NSP

0006 FIXED

0007 COST

0008 FIXED

0009 COST

0010 FIXED

0011 COST

0012 COST

0013 COST

0014 COST

0015 COST

Section C - Descriptions and Specifications

STATEMENT OF WORK

PART I: GENERAL SCOPE OF WORK

The Contractor shall complete the Detail Design and Construction (DD&C), engineering, and testing of Heavy Polar Icebreaker (HPIB) class cutter(s), and shall deliver completed cutters at the Contractor’s shipyard in accordance with the provisions of this contract, including all list of documents, exhibits, and other attachments listed in Section J.

Approvals, agreements, understandings, and design details on other contracts shall not constitute establishment of precedent for this contract, except as specified elsewhere in the contract. All departures from the requirements of this contract shall be fully justified in writing and submitted to the Government for written approval.

Only the Procuring Contracting Officer (PCO) and Administrative Contracting Officer (ACO) have the authority for the U.S. Navy to authorize or change work and sign contract documents. No other personnel are authorized by their formal communications or by their course of conduct to commit the U.S. Navy to price changes, schedule changes, or to perform different or additional work. The Contractor shall only execute tasking or requests for support under this contract when such direction comes from, or is agreed to by, the PCO or the ACO.

The award of the DD&C Contract does not indicate that the Government has approved or certified the design provided with the proposal. The Contractor shall remain fully responsible for delivering the cutter which meets the requirements of this Contract.

PART II: CONTRACT LINE ITEM NUMBER (CLIN) DESCRIPTIONS

C.2.1. CLIN 0001: ADVANCE PLANNING AND ENGINEERING FOR HEAVY POLAR ICEBREAKER (HPIB)

The Contractor shall perform the advance planning and engineering, and procure LLTM required to support the potential Detail Design and Construction (DD&C) of HPIB prior to DD&C option exercise, in accordance with the J-16 Advance Procurement Statement of Work and J-17 LLTM List.

C.2.2. CLIN 0002, 0003 AND 0004: DD&C OF HPIB CUTTER (OPTION)

The Contractor shall design and construct the cutter in accordance with the requirements of the contract. The Contractor shall conduct required verification, testing, and trials. The Contractor shall deliver the cutter(s) complete in all respects, including documentation and certifications, with deficiencies corrected. The Contractor shall ensure that the delivered cutter complies with all applicable laws of the United States and with the regulations/standards of applicable governing regulatory bodies.

The Contractor shall deliver the ship in class by the American Bureau of Shipbuilding (ABS).

C.2.3. CLIN 0005: DATA REQUIREMENTS

The data to be furnished hereunder shall be prepared in accordance with Exhibit A, Contract Data Requirements List (CDRL), attached hereto. For CLINs 0002, 0003, and 0004, the Contractor shall verify the final technical data deliverables, in accordance with Exhibit A, accurately reflect the ship as delivered and as modified under this Contract at the conclusion of the Warranty Period.

Costs associated with Exhibit A (with exception to Special Study Report (DI-A381)) shall be proposed under the applicable Cutter DD&C CLIN 0001, 0002, 0003, or 0004.

C.2.4. CLIN 0006: PROVISIONED ITEM ORDERS (OPTION)

The Contractor shall provide spares, shore-based spares, repair parts, special tools, support, and test equipment, in accordance with the requirements herein. Orders for this effort shall be authorized by the Contracting Officer and placed in accordance with Section C of this contract entitled “PROVISIONED ITEMS ORDERS – ALTERNATE II.”

C.2.5. CLIN 0007: SPECIAL STUDIES (OPTION)

The Contractor shall conduct special studies, analysis, and documentation in support of this contract, including but not limited to studies related to improvements in operating efficiencies, when issued an order in accordance with the Section H clause entitled "5252.216-9112 ORDERS (COST-PLUS-FIXED-FEE). The Contractor shall provide Special Study Report (DI-A381) in accordance with each order issued.

C.2.6. CLIN 0008: ENGINEERING AND INDUSTRIAL SERVICES (OPTION)

The Contractor shall provide industrial support services and production engineering in support of the cutter(s). Orders issued under this CLIN shall accomplish, in a timely manner, minor repairs and correct minor deficiencies that are deemed to be the Government's responsibility. Requirements under this CLIN might include, but are not limited to, the correction of problems with Government Furnished Equipment (GFE) or Government Furnished Materials (GFM), Government requirements identified by Acceptance Trial cards, and the development of various engineering products. Examples of work that might be accomplished under this CLIN include equipment installation, rigging support, and subject matter expert technical assistance. The requirements associated with this CLIN are over and above those specified in other contract CLINs. Orders for this effort shall be authorized by the Contracting Officer and placed in accordance with the Section H clause entitled "5252.216-9110 ORDERS (FIXED PRICE)."

C.2.7. CLIN 0009: CREW FAMILIARIZATION (OPTION)

The Contractor shall assist in the development and presentation of crew familiarization courses when issued an order in accordance with the Section H clause entitled "5252.216-9112 ORDERS (COST-PLUS-FIXED-FEE). Assistance may include Factory Training services from Original Equipment Manufacturer authorized trainers for major equipment identified in C.3.088; Contractor or Vendor SME assistance in analyzing, designing, developing, and implementing Crew Familiarization training; and hands-on SME training during construction and warranty periods.

C.2.8. CLIN 0010: DATA RIGHTS (OPTION)

The Contractor shall provide Government Purpose Rights (GPR) or better for those items of Technical Data (TD), Computer Software (CS), and Computer Software Documentation (CSD) that the Contractor has asserted delivery to the Government with less than GPR, but for which the Contractor has provided an option price for the Government to purchase GPR or better in Attachment J-21, Data Rights Assertions, Exceptions and Associated Pricing.

C.2.8. CLIN 0013, 0014, and 0015: CORRECTION OF DEFECTS AFTER LIMITATION OF LIABILITY (OPTION)

The Contractor shall correct all contractor responsible defects in accordance with the Section E clause titled "HQ E-2-0007 Warranty Period." Contractor responsible defects identified by the Government in accordance with the “HQ E-2-0007 Warranty Period” above the limitation of liability as established in HQ E-2-0012 LIMITATION OF CONTRACTOR'S LIABILITY FOR CORRECTION OF DEFECTS will be performed on a cost only (no fee/profit) basis on the CLIN associated with the respective Hull

PART III: SCOPE OF WORK, DETAIL DESIGN & CONSTRUCTION

C.3.040 Project Management C.3.040.1 Management Plan (MP). The Contractor shall provide and maintain an event-driven MP for Design and Construction. [DI-A001] C.3.040.1.1 The Contractor shall develop and maintain a MP which delineates the work effort, establishes significant accomplishments to be completed prior to each event, and describes the criteria for successful completion of each accomplishment.

C.3.040.1.2 The Contractor shall document the management organization and staffing to perform the required subcontractor / vendor coordination, technical performance, engineering, design, procurement, construction, quality assurance, testing, trials, outfitting, delivery and installation of the HPIB Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance (C4ISR) system as a separate section of the MP.

C.3.040.2 Project Manager. The Contractor shall assign a single project manager who is specifically charged with the responsibility to establish, implement and maintain a management system and organization that shall plan, organize, control, and oversee activities relating to this contract. The Contractor shall designate an HM&E technical lead and a C4ISR technical lead. The project manager shall also function as the primary interface with the Government’s Project Resident Office (PRO).

C.3.040.2.1 Design Site. The Contractor shall establish a Design Site to enhance communications with Government personnel and streamline the review process during the early stages of design. The Design Site shall be collocated with the Contractor’s design personnel or at a nearby location.

C.3.040.3 Single Source Integrator (SSI) C.3.040.3.1 An SSI shall be assigned as the sole point of contact responsible for the propulsion and integrated electric power systems.

C.3.040.3.2 The SSI shall be an organization that has demonstrated successful past performance in the same capacity on projects utilizing integrated propulsion plants of equal or greater complexity.

C.3.040.3.3 Responsibilities of the SSI shall include: design, equipment selection, procurement, documentation, obtaining ABS and regulatory approval, installation, alignment, testing, and integration of propulsion and integrated electric power system components and subsystems.

C.3.040.3.3.1 Components and subsystems include…